Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

An annuity promises that if the annuitant dies before receiving all scheduled payments, which of the following typically occurs?

All remaining payments are forfeited to the issuing company.

The remaining payments may be paid to a designated beneficiary.

The annuitant's estate receives a lump sum equal to the total contract value.

The annuity contract is automatically converted into a life insurance policy.

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Verified step by step guidance

Understand the concept of an annuity: An annuity is a financial product that provides a series of payments to an individual (the annuitant) over a specified period, often for the remainder of their life. It is typically used for retirement income planning.

Identify the key feature of the annuity in question: The problem mentions what happens to the remaining payments if the annuitant dies before receiving all scheduled payments. This is related to the terms of the annuity contract, specifically the death benefit provision.

Review the options provided: Analyze each option to determine which aligns with typical annuity contract terms. For example, forfeiting payments to the issuing company is uncommon unless explicitly stated in the contract. Paying the remaining payments to a designated beneficiary is a standard feature in many annuity contracts.

Clarify the role of the designated beneficiary: In most annuity contracts, if the annuitant dies, the remaining payments or a lump sum may be paid to a designated beneficiary. This ensures that the value of the annuity is not lost upon the annuitant's death.

Conclude based on typical annuity terms: The correct answer is that the remaining payments may be paid to a designated beneficiary, as this is a common feature in annuity contracts to protect the financial interests of the annuitant's heirs or beneficiaries.